Asian Equities Poised for Gains as Trump, Xi Conversation Boosts Sentiment
Asian equity markets are set to open higher on Monday, following positive cues from Wall Street and an amicable conversation between US President-elect Donald Trump and Chinese leader Xi Jinping.
Key Points:
* Australian shares edged higher, while equity futures in Japan and Hong Kong indicated early gains.
* US-listed Chinese shares surged 3.2% on Friday after Trump described the conversation with Xi as "very good."
* US futures contracts remained relatively unchanged in Asian trading due to Monday's market holiday in Wall Street.
* Trump and Xi discussed trade, TikTok, and fentanyl, potentially setting the tone for relations in the early days of the new administration.
* TikTok resumed service in the US on Sunday, adding to positive sentiment after Trump announced a three-month halt in enforcing a law requiring its Chinese owner to sell the company.
* Analysts expect a bullish outlook for equities driven by the positive tone of the Trump-Xi call, despite ongoing concerns about Trump's economic policies and geopolitical tensions.
* China's commercial banks will announce their one- and five-year loan prime rates on Monday, with expectations of a hold for a third consecutive month.
* The Bank of Japan is scheduled to release its policy decision on Friday, with economists anticipating a rate hike.
* Australian bond yields edged higher, following the trend in US yields.
* The Bloomberg gauge of the US dollar rose over 5% since Election Day, supported by weakness in currencies vulnerable to Trump's policies.
* The Chinese yuan, Mexican peso, and euro experienced significant declines against the dollar.
* Commodities, including oil and gold, extended their recent gains.
Key Events This Week:
* China loan prime rates (Monday)
* World Economic Forum in Davos begins (Monday)
* Donald Trump sworn in as 47th US President (Monday)
* Japan CPI and rate decision (Friday)